Toronto — Deceitful accounting and evasive testimony are among the reasons a $55-million lawsuit against the heirs of Anne of Green Gables author Lucy Maud Montgomery should be dismissed, defence lawyers said Friday in closing arguments.
Paul Schabas told court that the financial records of Sullivan Entertainment, the company that produced two Anne of Green Gables films in the 1980s, were "a very bad joke," while Julian Porter compared them to the American energy management company that has become synonymous with unethical business practices.
"This was exactly the kind of accounting Enron did," Porter told Justice Jean MacFarland. "It's just a smaller version."
The credibility of Sullivan Entertainment president Kevin Sullivan was also questioned.
"Many times, Mr. Porter and I had to repeat questions before we got an answer or not," Schabas said. "Sometimes we gave up."
Saying his testimony was cluttered with the hallmarks of dishonesty, Schabas said Sullivan often deflected questions to underwriters, other lawyers and accountants while under cross-examination. Schabas later presented a 40-page summary outlining discrepancies between statements Sullivan made before and during trial.
Schabas also emphasized that some of the defendants — Montgomery's 88-year-old daughter-in-law Ruth Macdonald, her daughter Kate Macdonald Butler and lawyer Marian Hebb — had a right to publicly air their dispute with Sullivan after at least 40 requests for an audit throughout the 1990s went unheeded. He later stressed such publicity was in the public interest because Sullivan was misleading potential investors in his prospectus.
"They were rightly, the Macdonalds and Marian Hebb, at the end of their patience," Schabas said. "They wanted to go public, and they did so, as was their right."
"This prospectus could not go to market. Significant changes had to be made," added defence lawyer Vicki White. "Investors do not like uncertainty."
Porter, whose closing arguments sometimes sparked laughter, said Hebb was a good lawyer for repeatedly dogging Sullivan for financial statements.
"This is like a Hollywood movie. Show me the colour of the money," he said, slightly botching the famous phrase from 1996 movie Jerry Maguire.
Sullivan, who was absent Friday due to pneumonia, is suing the heirs because of a news conference they held four years ago, alleging they libelled the company, ruined its IPO and cost it millions in global expansion plans.
At the event, the heirs said Sullivan had "stonewalled" their right to an audit and withheld profits from the two Green Gables movies.
Sullivan insists the productions did not make any money.
A verdict is expected by the end of the year.
